BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1144|
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THIRD READING
Bill No: AB 1144
Author: Hall (D)
Amended: 6/19/13 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 4-0, 6/10/13
AYES: Beall, Block, Gaines, Yee
NO VOTE RECORDED: Walters
SENATE APPROPRIATIONS COMMITTEE : 6-1, 6/24/13
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NOES: Walters
ASSEMBLY FLOOR : 51-19, 5/16/13 - See last page for vote
SUBJECT : Public Employees Medical and Hospital Care Act:
City of Carson
SOURCE : City of Carson
DIGEST : This bill, for an employee hired on or after January
1, 2014, requires the employer contribution for post-retirement
health benefit coverage for an employee of the City of Carson to
be based on specified percentages associated with the employee's
credited years of service, which would reach 100% when the
employee attains 10 years of credited service. This bill
defines credited service as service performed with the City of
Carson. Requires that the employer contribution with respect to
each employee be mutually agreed upon through collective
bargaining, as specified, except for an unrepresented employee,
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for whom the employer contribution would be established by a
city council resolution. This bill requires that the employer
provides any information requested by the Board of
Administration of the California Public Employees' Retirement
System (CalPERS Board) that it deems necessary to implement the
section.
ANALYSIS :
Existing law:
1. Establishes PEMHCA, administered by the CalPERS Board, to
provide health coverage for employees and annuitants of the
State and the California State University.
2. Allows a school or local agency employer to contract with
CalPERS for PEMHCA and requires the employee or annuitant
contribution, when added to the employer contribution, to
cover the total cost of the PEMHCA coverage premium.
3. Defines an annuitant as one who, among other requirements,
retires from the system within 120 days of separation from
public employment.
4. Does not allow contracting employers to provide PEMHCA
coverage to active employees without also covering retired
annuitants. However, with respect to the employer
contribution for annuitants, provides specified options
available to the contracting agency, including:
A. An equal employer contribution amount for both
active employees and annuitants. Under this option, an
employee who retires and meets the definition of
annuitant becomes 100% vested and receives an employer
contribution amount equal to what the active employees
receive; or
B. For a contracting agency that joins PEMHCA on or
after January 1, 1986, the option to pay a lesser
employer contribution amount for annuitants than for
active employees as long as the agency increases its
contribution for annuitants each year until it equals
the agency's contributions for active employees as
specified; or
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C. A pre-set "vesting schedule" based on an employee's
credited years of service to determine a set percentage
of the employer contribution amount for annuitants.
Under this option, an annuitant would have at least 10
years of CalPERS credited service to qualify for 50% of
the employer contribution and would need 20 years, all
with the employer providing PEMHCA, to become eligible
for 100% of the employer contribution. At least five
years must be with the employer providing PEMHCA; or
D. Allows under the 10-20 year vesting schedule, an
employer contribution of 100% if the annuitant retired
for disability or if the annuitant had 20 years of
service, regardless of the length of separation from
service prior to retirement.
5. Provides specified and individual variations to the above
options and requirements under separate statutes specific to
the City of San Diego, school employers, Alameda County
Transportation Improvement Authority, and Mariposa County.
These statutes are subject to collective bargaining
agreements.
This bill:
1. Requires the employer contribution with respect to each
annuitant to be mutually agreed upon through collective
bargaining by the City of Carson and the exclusive
representatives of employees of the city. Permits the
employer to adjust the amount from time to time through a
collectively bargained memorandum of understanding (MOU).
2. Requires changes to the employer contribution to be ratified
by a resolution passed by the city council of the City of
Carson.
3. Requires, in the case of employees not represented by a
bargaining unit, the employer contribution with respect to
each annuitant to be determined pursuant to a resolution
passed by a majority of the city council of the City of
Carson.
4. Requires the City of Carson to certify to the CalPERS Board,
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in the case of employees not represented by a bargaining
unit, that there is not an applicable MOU.
5. Defines the credited service to mean credited service
performed with the City of Carson.
6. Requires the City of Carson to provide the CalPERS Board any
information requested that it determines is necessary to
implement these provisions.
7. Specifies that the proposed vesting schedule applies only to
the City of Carson and only with regard to an employee of the
city who is first hired on or after January 1, 2014.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Minor, absorbable administrative costs to CalPERS (Special
Fund).
Unknown, potentially significant savings to City of Carson
(Local Fund).
SUPPORT : (Verified 6/26/13)
City of Carson (source)
AFSCME, Local 809
City of Carson Association of Confidential Employees
City of Carson Association of Management Employees
City of Carson Professional and Supervisors Association
ARGUMENTS IN SUPPORT : According to the sponsor, the City of
Carson does not currently have a vesting schedule (i.e.,
annuitants currently get 100% of the employer contribution
toward post-retirement PEMHCA if they have 5 years of CalPERS
credited service). The City of Carson and its employees'
representative have collectively bargained to implement a
vesting schedule that would require annuitants to have at least
10 years of credited service with the city to get 100% of the
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employer contribution. However, "this vesting schedule is not
currently authorized by law and would require legislative action
to authorize an exemption from the pre-set vesting schedule
currently in statute."
ASSEMBLY FLOOR : 51-19, 5/16/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Fox, Frazier, Garcia, Gatto, Gomez, Gordon, Gray, Hall, Roger
Hern�ndez, Jones-Sawyer, Levine, Lowenthal, Medina, Mitchell,
Mullin, Nazarian, Pan, Perea, V. Manuel P�rez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Ting, Torres, Weber,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Bigelow, Ch�vez, Conway, Dahle, Donnelly,
Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor,
Nestande, Olsen, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Allen, Beth Gaines, Gorell, Grove, Holden,
Melendez, Morrell, Muratsuchi, Stone, Vacancy
JL:d 6/26/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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